In a blog post earlier this month, Mark Brinkley wrote that the zero carbon agenda is dependent on private wire networks, which he contends are anti-competitive. While I have a lot of respect for Mark, in this case his arguments aren’t valid. Here’s why.
Mark’s arguments in bold italic…
If your low or zero carbon (LZC) energy technologies aren’t on the roof or in the garden, it might as well be in the Indian Ocean.
Let’s set aside the benefits of local electricity generation (e.g. reduced transmission losses, lower impact on transmission infrastructure, etc). New requirements for onsite energy don’t just relate to power. More importantly, they also relate to heat.
Decarbonisation of heat is the key to reducing emissions from the built environment and reducing carbon from heating is only possible onsite or very close to it, at least for the next decade or two. To focus only on power is to miss the bigger picture.
Government insist that any zero carbon development uses private wire.
The reality is exactly the opposite. Certainly the Code for Sustainable Homes was very confused on the issue but since then Government appears to have woken up.
While they acknowledge that small schemes may still operate over private wire networks, DECC and CLG are eager to separate this issue from building regulations and the zero carbon definition.
That’s what’s really behind the passage that Mark quotes. CLG are trying to sidestep the private wire issue by suggesting that ESCOs may come forward to operate on DNO wires. Along with OFGEM, they are keenly aware of the competition issues raised by Citiworks but know that this doesn’t spell the end for private wire.
Private wire is incompatible with competition and without locking in customers, ESCOs will fail.
Private wire is compatible with OFGEM’s mission and the Citiworks ruling provided you allow third party access (i.e. access to your customers by other suppliers).
Yes, third party access can make schemes slightly less secure and so harder to finance, but does not affect most of the financial benefits of operating over private wires, which come from avoiding compliance costs associated with the Renewables Obligation and Climate Change Levy and from avoiding most distribution (DUoS) and transmission (TUoS) charges.
And don’t forget that private wire schemes will be charging these third parties to cross their wires, effectively imposing their own DUoS fees.
If ESCOs serve more widely, there is no point in associating them with low carbon developments.
Let’s assume that an LZC energy generation scheme is installed as part of a large mixed-use development. And over time the energy scheme is so successful that it starts to supply low carbon heat and electricity to the area around the new development: schools, homes, local authority buildings.
Far from being a bad thing, this is exactly what needs to happen in order for us to have any chance of meeting the 2050 carbon target!
Sure, if it grows to the point where it’s no longer license exempt, the ESCO would have to compete directly with the Big Six and other energy suppliers but, provided a number of key mechanisms are in place (e.g. cost-reflective distribution charges), there’s no reason an ESCO shouldn’t make it work. Done properly, there will still be economic benefits to locating renewable generation close to customers that the Big 6 don’t get.
Also, in this scenario some customers may switch away from the ESCO, but depending on the way third party access is managed, this may not affect the total amount of low carbon heat and electricity produced. The carbon reductions imposed by building regs should still be present.
Without private wire, the zero carbon objective is unachievable.
The definition of onsite needs to be independent from any considerations about whether a scheme uses private wire. ESCOs should be able to supply low carbon heat and electricity to a development and, if successful, expand to strip the carbon out of surrounding stock.
A new definition of onsite may be challenging, but it is necessary and it must not rely on whether an energy scheme is licensed or unlicensed.
carbon limited 
How can a Private Wire Network Avoid Availability Charges?
Following on from Casey Cole’s most interesting blog, dealing with ESCO’s and Private Wires.
We are currently facing a very real problem in the practical implementation of a Private Wire Network.
We are in the process of planning a network for a new housing development, in doing so it is obviously necessary to ensure that continuity of electricity supplies are maintained.
Utilising a form of renewable generation, there is of course some fluctuation of power delivery and, with a single source of supply, a risk of complete failure. Having a grid connection on the network to import and export power is an obvious solution to this, however we are being quoted vast sums guarantee demand availability from the grid.
Unless there is a change in the definition of “on site” generation, it is not clear how this problem can be overcome, it currently undermines the scheme.
Jonathan,
For all the schemes we’re carrying out or advising on, there is a grid connection. So a capacity charge is just a fact of life and the generation scheme will have to support it in order to stack up.
Just as a sanity check, I’d expect the capacity charge to have two components: distribution and transmission. Distribution will charged according to the size of the connection (something around £13/kW) and transmission will be charged according to your actual peak demand (maybe 2x the £/kW of the distribution charge but your actual peak will be lower than your capacity). Does that fit with what you’re being quoted?
Casey,
Thanks for the response.
The problem we face is an availability requirement of 6MW on a slowly growing development.
If the rules were such that we had the LZC generation within say 1 mile of the development, but not physically connected, we could overcome the problem. The DNO would install the local network as usual and the consumers would purchase power from who ever they wish, hopefully the local LZC source.
In the early stages of the development, the ESCO could operate the LZC generation at full output and even make a profit.
This cannot be a unique situation, is there any likelyhood of a rule change?
Jonathan,
Depending on the mix of domestic and commercial, at 6MW you’re unlikely to fall under the license exemption threshold anyway so you won’t be able to do private wire.
What’s to stop you putting the LZC generation on DNO or IDNO wires? If you say the ESCO could generate a profit in the case of LZC generation a mile away, why not put it on site but not onto a private wire network?
Casey
My understanding of the Code for Sustainable Homes is that to get to level 4 we really need to have the credits for LZC generation and that cannot be counted unless it is on a private wire network.
Is this not correct?
If you’re talking about ENE 7 (LZC technology), it’s not a mandatory element. I.e. you can get to level 4 without it. If you mean ENE 1, currently the LZC generation has to be on dwelling or connected by private wire (or “direct connection” whatever that is). But be careful as even with private wire some communal LZC technologies don’t count under SAP! This muddle is one of the reasons the zero carbon consultation is avoiding the issue of private wire altogether (and SAP is up for review).
Your project may be a perfect example of the problem: I suspect in your case private wire wouldn’t be legal because you’re over the exemption threshold, yet CSH is forcing you to use private wires! It would be worth having a conversation with your Code assessor and the BRE to try to find a way through. CLG has accepted that referring to private wire in the Code was a mistake so hopefully they’ll be amenable.
Thank you Casey, you comments have been very helpful.
Sorry guys I just have to speak out.
I speak as a simple Builder, we are a practical breed, not scientists, but we are being treated with rafts of legislation written by lunatics…
As builders we know how to build, but nowadays we spend ages faffing around for months unproductively trying to get figures and costs to stack with too many variables of components, technologies and building elements. This is typically done by using expensive experts who have no single answer and Architects ultimately only became an Architect because they have a passion for drawing.
The truth is we are scared, fudging it and no-one on site understands it.
The over complex rule sets are written by boffins that should go and work for the energy companies (the source of Co2) where they would be better employed.
What we need is to bring back the old Elemental U values but tightened up to meet very good thermal standards, say:
Walls 0.15
Windows 1.0
Roofs 0.1
Floors 0.13
Air tightness of 4
MVHR and 70% LE lighting
Revise SAP just to calculate the TER and DER based on a max parameter /m2 to prevent too many windows in design.
This way the construction industry can focus and come up with tailored solutions, components, methods and technologies that will achieve a set of U values set by Building Regs – Everyone will know what they are doing and be able to get on with the job in hand – easier to price, programme, legislate, check and build.
It is clear to me that the true future of carbon reduction sits with the energy companies with billions of pounds and teams of scientists, not us poor builders.
Also get rid of gas, and go all electric. Its running out and apart from anything else it is dangerous stuff to install in blocks of flats and a stupid idea.
Our job as builders is to build a good product to save energy, not produce energy, The energy companies job is to produce clean energy without creating C02
Nuclear Fusion and keep it simple – the way ahead….